SAAB’S FUTURE as a car manufacturer looks even less certain this week following comments from Bob Lutz, vice-chairman of General Motors (GM), which owns the Swedish company.
“The definition of insanity is doing the same thing over and over again and expecting a different result. Saab has lost millions and millions of dollars . . . this cannot go on. At a time of economic hardship, you owe it to people to look at things like this,” Lutz told The Irish Times.
“They keep telling us that the next model will be a success but it doesn’t happen,” he added.
Saab executives counter by saying plans for a competitor for BMW’s 3 Series and Volvo’s XC60 were shelved by GM, thus removing it from a potentially lucrative market segment.
However, GM is under tremendous financial pressure and being forced to eliminate loss-making operations. It is understood that Saab has only made occasional profits in Europe since its purchase by GM in 2000. Some estimates of GM’s losses at Saab – including the purchase price – have been put at several billion dollars.
Lutz said GM had not yet found a buyer for Saab, confirming only that the company’s future is under “strategic review”. There is now increasing speculation that Saab may be one of three companies in the group – along with Pontiac and Hummer – to be closed completely.
GM currently has eight brands, of which these three brands account for less than a 2.5 per cent market share in the US. Saab’s problems in the US stem from a perception that it is not a luxury manufacturer – and in Europe, from the fact that GM is seen to have steered the company away from its unique profile by forcing it to use components and technology from companies like Opel.
Saab has been in existence since 1939, and has been producing cars since 1949.